Big data. It’s one of the latest buzz words flying around these days. I don’t mean to downplay its significance or how it will change how all businesses operate, but when it comes to the finance business, many community banks and credit unions have a long way to go. It’s basic human nature. When a new way to look at, approach or conduct business presents itself, people naturally gravitate toward the implications and all of the possibilities this new approach brings. The problem with big data is that many financial institutions are struggling to harness the power of the data that they already possess and this is a problem.
While it is exciting to think about predictive analytics and futuristic decision-making models, most financial institutions would be better off looking at all of the information they already have at their disposal and how they are or aren’t using it. Before we can take the plunge into managing large (I mean really large) chunks of data, many financials can practice by taking the data they have and figuring out how little changes in consumer data can make a big impact on their bottom line.
Looking for non-interest income? Why not look at the activity of your current cardholders and figure out how you can generate more income by changing existing consumer behavior? You don’t need a huge data processor to do this. Rather, you need someone to pull reports and run the numbers. Looking for more loans? Why not look inside your consumer base to find those who are most likely in or closely approaching a lending window of opportunity?
When financials start to become more data savvy with the information they already have at their disposal, opportunities present themselves. I understand that many banks and credit unions are strapped for time and money, but when we don’t understand that an investment of time can yield more money, we become more and more focused on future solutions rather than creating the solutions that will become the building blocks or bridges to new ways of thinking about and doing things.
I’ll leave you with this. One of our clients at Chatter Yak! was recently looking for an uptick in mortgage business. After working with them on their strategic goals, they took a look at the data in their core processor. They were able to identify the most likely candidates for mortgage lending opportunities. By combining that list with their email database and running a loan-lead generation campaign using Yak Tracker, they were able to generate 840 loan leads in 6 days! Many financials would love to have that many loan leads in a quarter.
Not all data is created equal and not all data must be “big”. When you start with what you have and do a little work, you create new possibilities for your business. Possibilities are not limitless, so financial institutions large and small must capitalize on every opportunity they get or can create. Start small, then go “big.”